Britain and the European Union have agreed a draft text on their future relationship, but two sensitive issues — Gibraltar and fishing — were still unresolved as leaders prepared to meet on Sunday.
The draft gave markets a lift, with the pound rising by nearly 1 per cent as investors welcomed signs that 18 months of negotiations were moving toward a deal. The agreement is meant to keep Britain closely tied to its biggest trading partner while the transition period continues.
Prime Minister Theresa May said the talks were close to producing a settlement she could take back to London. “The British people want this to be settled, they want a good deal that sets us on course for a brighter future... That deal is within our grasp and I am determined to deliver it,” she told reporters in London.
EU officials said the remaining disputes should not be allowed to block the wider package. Donald Tusk, who chaired the summit process, said: “It has been agreed at negotiators’ level and agreed in principle at political level.”
The main political declaration, a separate document from the 585-page withdrawal agreement, sets out an ambition for a broad economic partnership. It says the relationship should cover a free trade area, wider sectoral cooperation and rules to ensure a level playing field.
One of the most important points for May is the Irish border. The text says the EU will look for ways to avoid activating the backstop, including technical and administrative solutions favored by her allies, which could reduce the need for Britain to align its wider trade rules with those of the continent.
The document also says the future relationship should respect the integrity of the EU single market and customs union, while recognizing the United Kingdom’s independent trade policy beyond the partnership. That language was aimed at concerns in Northern Ireland that any arrangement to avoid a hard border with Ireland could separate the province from the British mainland.
Spain remained the main holdout over Gibraltar, with Madrid seeking leverage over how any future deal would apply to the territory. France and other member states were also pressing for national interests, including access to British fishing grounds and demands that Britain follow EU rules on the environment, tax, labor and industry.
May had already met European Commission president Jean-Claude Juncker on Wednesday and was due to see him again on Saturday evening, at 6 p.m. (1700 GMT), in a final push to clear the remaining issues. The European Commission said Juncker had encouraged her to speak with Spanish Prime Minister Pedro Sanchez, which they did late on Wednesday.
Despite hopes in London’s financial sector, the draft did not improve Britain’s position on financial services. May also updated her cabinet by teleconference, though her spokesman said no final deal could be confirmed before the EU summit.
The transition period is currently due to end in December 2020 after 21 months, but it can be extended by up to two years. May has said it must end before the British election due in mid-2021.
